Training | 2009.11.22
Treasury hit as council housing demand grows
Demand to build council homes is far exceeding government expectations, putting pressure on the Treasury to release extra cash as part of the spending review next month.
The pressure amounts to an end to the 20-year effective moratorium on council house building, amid a new cross-party consensus to build council homes.
Nearly 90 local authorities, including large Conservative ones such as Birmingham, have bid to build a further 3,500 council homes as soon as possible. The Department for Communities and Local Government had planned and budgeted for a demand to build 1,200 homes.
The bids comes on top of 49 councils that were given the go-ahead by the communities department in the summer to build 2,200 homes on the condition that they were on site by March next year.
The unexpectedly large number of local authorities bidding in the second round represents the largest potential council house building programme in more than two decades.
The housing minister, John Healey, is hoping to reveal the names of the successful bids by the end of the year, but is looking for extra cash from the Treasury to help fund the programme. In an effort to widen its appeal, he is offering to set tighter conditions on councils in terms of the training and apprenticeship programmes.
The communities department regards the many Tory councils making bids as a sign that the previously intense political divide on the issue of council house building is beginning to narrow. Both the Unite and Unison unions have also urged a new council house building programme.
Healey has already announced plans to dismantle the current complex and restrictive council housing finance system and to give councils more leeway to manage waiting lists.
Healey is in a wider battle to make the issue of housing more visible and political in the run up to the election. Partly due to very low interest rates and government help, the forecast for repossessions this year has fallen from 75,000 to 48,000. If repossessions were to take place at the same rate as the 1990s, Britain would be facing 91,000 a year.
For more information, please visit
http://www.guardian.co.uk/society/2009/n[...]ousing-demand-treasury-funding
